Thin film microstructure and its properties can be effectively altered with post deposition heat treatments. In this respect, CdTe thin films were deposited on glass substrates at a substrate temperature of 200 °C using thermal evaporation technique, followed by air annealing at different temperatures from 200 to 500 °C. Structural analysis reveals that CdTe thin films have a cubic zincblend structure with two oxide phases related to CdTe 2 O 5 and CdTeO 3 at annealing temperature of 400 and 500 °C respectively. Regardless of the annealing temperature, the plane (111) was found to be the preferred orientation for all films. The crystallite size was observed to increase with annealing temperature. All films were found to display higher lattice parameters than the standard, and hence found to carry a compressive stress. Optical measurements suggest high uniformity of films both before and after post deposition heat treatment. Films annealed at 400 °C displayed superior optical properties due to its high refractive index, optical conductivity, relative density and low disorder. Furthermore, according to the compositional measurements, CdTe thin films were found to exhibit Te rich and Cd rich nature at regions near the substrate and center of the film respectively, for all annealing temperatures. However, composition of the regions near the substrate was found to become more Te rich with increasing annealing temperature. The study suggests that changing the annealing temperature as a post deposition treatment affects structural and optical properties of CdTe thin film as well as its composition. According to the observations, films annealed at 400 °C can be concluded to be the best films for photovoltaic applications due to its superior optical and structural properties.